Washington Trust Company to pay $9M for racial bias in Rhode Island home loans

PROVIDENCE, R.I. (WLNE) — Washington Trust Company is accused of racial bias in its home mortgage lending in Rhode Island.

U.S. District Attorney Zachary Cunha said Wednesday the community bank engaged in a practice of lending discrimination by redlining mainly Black and Hispanic neighborhoods.

To resolve the allegations, Washington Trust agreed to pay $9 million.

“Redlining is an illegal practice in which lenders avoid providing credit services to individuals living in communities of color because of the race, color, or national origin of resident in those communities,” explained Cunha.

Washington Trust, which is the oldest community bank in the country, is accused of failing to provide mortgage lending services to those neighborhoods from 2016 through about 2021.

While the bank has expanded throughout Rhode Island, Washington Trust never opened a branch in predominately Black and Hispanic communities, according to federal prosecutors.

Cunha said Washington Trust relied on mortgage loan officers working out of only mainly white areas as primary source for generating loan applications.

The complaint further alleges that Washington Trust failed to train or incentivize its lending staff or conduct outreach and marketing of its mortgage services to compensate for its lack of presence in Black and Hispanic areas.

When compared to the community bank, over the same six-year period, Cunha said other banks received almost four times as many loan applications every year in mainly Black and Hispanic neighborhoods in Rhode Island.

Among other things, Washington Trust agreed to open two new branches in Black and Hispanic neighborhoods in the Ocean State and hire a director of community lending to oversee the continued development of lending in communities of color.

“This investigation highlights an issue that has plagued our communities for too long,” Harrison Tuttle, president of Black Lives Matter Rhode Island PAC, told ABC 6 News in a statement. “Access to fair and equitable lending is a right that should be enjoyed by every resident of Rhode Island, regardless of their racial or ethnic background.”

Anyone who wants to report lending discrimination should call the Justice Department’s housing discrimination tip line at 833-591-0291.